About this Author

College chemistry, 1983

The 2002 Model

After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases.
To contact Derek email him directly: derekb.lowe@gmail.com
Twitter: Dereklowe

November 10, 2011

Makena's Market. Or Lack of One.

Posted by Derek

I put up a note here yesterday about KV Pharmaceuticals and their complaint to the FDA about compounding pharmacies selling a version of their Makena progesterone ester drug. The conclusion was that the combination of Makena's high price and the FDA's we-won't-enforce attitude towards the compounders was hurting sales.

And that it is. The people at BioCenturyhave more. Basically, the estimate is that about 140,000 women per year fall into the potential treatment class of high-risk pregnancies. How much Makena has been sold since its launch last March? The company says that about 2,400 patients have started treatment or are enrolled to start. Now, we don't have figures on how many patients have filled prescriptions from compounding pharmacies, and I don't know how many people took this therapy before KV got involved.

"Most of what Bill Gates said to me over the course of two interviews found its way into the cover profile of him I wrote for the most recent issue of Forbes. But one set of ideas didn’t really make it: his unique and thoughtful perspective on the pharmaceuticals industry."

So, was the progesterone ester always formulated at these pharmacies prior to introduction of KV's approved product, Makena, in March? Who made the IV formulation in the past? Was it always one of these compounding pharmacies? That would explain why they (KV) haven't had market penetration. Will there be liability for the pharmacies if they started doing it after the FDA approved drug came to market as opposed to that they were doing it all along in the past anyway?

I'll bet that KV thought that the FDA would help them capture a lot more of that market.

Adam's laboratories did a similar thing with guaifenesin. All the products on the market were "unapproved", so they got their product approved, then the FDA sent all their competitors "cease and desist" letters. Aisling capital made a 15x return on their investment in Adam's when it was bought by Reckitt Benckiser for $2.3B.

If you think about the economics, I'm guessing a dose of Makena costs KV less than $100 to make (it's not high volume). So at $1300, that's a pretty healthy profit if you capture even 70% of the market. And since it's used high-risk pregnancies, it's not like the need ever goes away.

I think the fact the FDA didn't play along completely blind sided them. However, it does appear that things are turning around for them.